The gas crisis is bringing misery and death to people already struggling to survive this winter.
It is the result of the government and Ofgem failing to take basic precautions for when international gas prices rise:
- they allowed gas storage units to close;
- failed to invest in meaningful energy efficiency programs;
- and left privatised retailers to expose consumers to volatile wholesale prices without buying in advance.
We know that UK consumers cannot afford to pay energy companies more money for these mistakes. The money must come from those benefiting from the crisis.
In October we proposed a windfall tax on the profits of fossil fuel extractors. We argued that some part of the $65 billion they made between July and October must not be spent re-investing in fossil fuel exploration, development and extraction, which will further accelerate the climate crisis. Instead, a proportion of the excessive profits must be spent helping consumers keep warm and put food on the table.
Analysts now forecast that the average energy bill will rise almost 50%, to about £1865, this April. National Energy Action estimates this will push another 2 million people into fuel poverty, while of course creating further pain for the 4 million people already unable to pay their bills.
Across the industry, experts such as retail chief executives, former energy ministers and belatedly the labour party are now joining us in calling the government to announce a windfall tax before consumer prices rise in April.
We demand again that the windfall revenues from the international gas crisis are spent on helping people stay warm this winter. To ensure the poorest are reached:
- This should be via a flat payment to each household and not means tested.
- The money should not be spent on funding reduced bills through VAT removal, which would disproportionately benefit the richest consumers.